Groupon Raises Huge New Round at $1.2 Billion Valuation (Updated)

Fast growing Groupon, fresh off a $30 million round of financing that valued the company at around $250 million, is back raising new money. They have closed or are in the process of closing new venture money at a $1.2 billion valuation, say multiple sources (one source says that’s not exactly correct, but close).

Groupon offers a daily deal in several cities each day, offering steep discounts of 40 to 90% off a variety of services (i.e, spas, restaurants, etc.), if enough people buy the deal, everyone gets it, if it doesn’t reach a critical mass, no one gets the deal. The site has accummulated 3 million subscribers and currently manages roughly 40 markets. 3 million “groupons” have been purchased since November 2008, says the company.

We interviewed Groupon CEO Andrew Mason last week about a number of clones that have popped up recently.  In the interview, he said he was focused on increasing the number of cities to 100 by the end of this year. He declined to speak to us about this story, however.

Update: We’re hearing from another source that Russian Internet holding company Digital Sky Technologies, which recently took significant stakes in Zynga and Facebook, may be the lead investor. We’re also hearing valuation may be $1.35 billion.

Update 2: More details here.